Peter Jackson in cast talks for The Hobbit

The Hobbit still has not been given the official green light, but Sir Peter Jackson is in Los Angeles this week quietly meeting with actors.

The New Zealand-based director's casting trip, which also included stops in New York and the UK, underscores the progress being made on a complex series of deals to bring JRR Tolkien's epic fantasy novel to the big screen.

Sources say Jackson's pact with Warner Bros to direct the two-part Hobbit adaptation is close to done, but the sticking point continues to be the dire financial situation at MGM, which holds half the rights to the property.

Warners, which is acting as the lead studio on the co-production, is furiously negotiating with MGM, which is being steered by a committee of creditors and financial stakeholders. Even if Warners wanted to fund the films itself, that would require a sign-off from the somewhat rudderless MGM.

Jackson, who has been in LA since Saturday, is working with casting director Victoria Burrows on assembling what will likely be a large, international cast for the project.

The Hobbit has so far taken a bumpy road to the screen. Director Guillermo del Toro abruptly left the project in May, citing scheduling delays.